Wednesday, September 06, 2017

How Big a Deal Is Trump's Debt Limit Deal?

Today brought the unexpected news that President Trump had reached an agreement with the Democratic congressional leadership (later publicly endorsed by Senate majority leader Mitch McConnell) to pass legislation combining Hurricane Harvey disaster relief with an extension of the debt ceiling until December 15 and a continuing resolution funding the federal government through the same date. If a bill containing these provisions successfully makes its way through Congress, it will remove the possibility of a government shutdown or default on the national debt for the next three months.

The media immediately formed a consensus that Democratic negotiators had claimed a major achievement at Republican expense. Politico reported that Trump "sided with Democrats . . . relinquishing the GOP's leverage." The Atlanticcalled the agreement "Trump's Early Christmas Gift to Democrats." Jonathan Swan of Axios even wrote that Trump had "handed Nancy Pelosi and Chuck Schumer the deal of the century."

It's undisputed that Trump indeed quickly accepted Democratic leaders' offer of a three-month debt ceiling extension over his own party's (and Treasury Secretary's) preference for a longer relief period. The conclusion that Trump had betrayed his fellow Republicans was widely shared by both sides on Capitol Hill; frustrated Republican incumbents privately (and in some cases publicly) griped about the president, while jubilant Democrats attempted to control their outward expressions of glee lest they provoke Trump to reconsider his decision.

But did Schumer and Pelosi really pull off the "deal of the century," justifying the multiple expressions of unfettered liberal elation and conservative dissatisfaction that dominated the day's analysis?

The case for why the deal with Trump was a big win for the Democrats and a horrible defeat for the GOP goes something like this: Democrats managed to secure hurricane relief and three more months of government funding without making any policy concessions to conservatives, while simultaneously guaranteeing that another vote on raising the debt ceiling will be required in just three months' time. Because Democratic votes will be needed once again to avoid a potentially calamitous debt default in December, the party will be in good position to make additional policy demands in exchange for its support. Moreover, the need for Congress to spend the last few weeks of 2017 on spending and debt negotiations will complicate Republican ambitions to complete a tax reform plan before the holidays, leaving the party with no major legislative achievements to show for its first full year in power since 2006.

The main problem with this analysis is that it arguably overstates the capacity of both parties—the Republicans today, the Democrats in the future—to leverage government funding and debt ceiling showdowns to extract major policy concessions from the opposition. It's true that some conservatives had planned to hold the debt ceiling hostage in order to force broad-based spending cuts, just as some liberals might now dream of using similar tactics to jam a legislative authorization of DACA through an otherwise reluctant Congress. But we've had enough of these governing crises over the past few years to conclude with some confidence that they are ultimately resolved via bipartisan agreements that more or less preserve the policy status quo. A hypothetical Democratic threat to endanger the credit of the United States over immigration reform wouldn't necessarily have any greater chance of success than the Republicans' misguided 2013 attempt to compel the repeal of Obamacare by shutting down the government.

Whether the Trump-Pelosi-Schumer deal represents a serious blow to tax reform's chances in the current Congress also depends on one's prior estimation of those chances—which were clearly on the wane even before today's news broke. Republicans are not even close to passing the budget resolution that is a necessary procedural precursor to the consideration of their tax reform plan. (Also, they do not, as of yet, have a tax reform plan.) Republicans can even take solace in apparently avoiding a damaging but entirely plausible scenario: a standoff between Trump and Democratic leaders over funding for a border wall that could have led to an indefinite government shutdown, leaving the congressional GOP caught hopelessly in the middle.

But while the policy implications of Wednesday's deal are unclear and possibly quite modest in scope, the political consequences are much more significant. By endorsing the Democrats' offer in negotiations over the stated position of his own party's congressional leaders, Trump humiliated Mitch McConnell and Paul Ryan, further intensifying the war between the president and his nominal allies in Congress that has been steadily progressing all summer. This was no accident. Trump nurtures a lengthening list of grievances with both men and was apparently looking for an opportunity to land a few punches. The GOP thus moves closer to a state of open schism between its executive and legislative wings, and the hopes of last winter that Trump would happily follow the direction of veteran party leaders recede even further into the distance.

About Me

I am a political scientist at Boston College who specializes in the study of American political parties, elections, Congress, and voting behavior. Email: david.hopkins {at} bc.edu. The name of this blog honors the notable political philosopher and practitioner George Washington Plunkitt.